Paul Lejuez: Paul Lejuez, Citigroup. Curious if you could talk about the percent of your sales done on cash — pay with cash and how that’s changed over time? How does it differ by banner? And then also curious about the decision to pilot in Canada, the loyalty program, if that’s going to be indicative of the U.S. market just in terms of a customer demographic perspective?
Mary Dillon: Yes. Let me start with the Canada loyalty test, and I’ll ask somebody also to opine also on the cash. The test in Canada, I would consider more of a technical test. It’s like we have to set up the technology to be able to exchange points for cash and all the things that go behind that. And to your point, it’s not nearly a replicate of the U.S. market, but it’s a helpful place for us to be able to test and learn just as we roll out the technology. There’s other ways that we’re assessing how the impact will play out in terms of the U.S. business. But we have a lot of confidence just studying other loyalty programs, which I know some of them pretty well and in understanding our consumer needs and expectations that we’re going to be able to make this work. So think about Canada as a technical role and then a role in the U.S. over time to that program.
Robert Higginbotham: I’ll jump in on the tender mix actually. So we do over index a bit on cash, but not too dramatic extent to be honest. We don’t really parse it out beyond that. What we have seen in terms of trend is a trend away from cash more towards credit and debit much like the rest of the world and certainly through the past couple of years plus of economic expansion as the consumers kind of started to stretch a little bit, we’ve seen a little bit of a credit impact there.
Tom Nikic: Tom Nikic with Weber Securities. I want to ask about the partnership with adidas. About a year ago, you put out a press release announcing a new partnership, expecting to — I think it was tripled the penetration of adi sales. How does the fact that YEEZY doesn’t exist anymore — affect that? And Mary, have you had a chance to chat with their new CEO and talk strategy with them?
Mary Dillon: Yes. So adidas is a very important brand partner for us. So I’ve already chatted with Bjorn. And in fact, we’re going to — meet him in person very soon. And we are very committed to our long-term partnership with adidas. And obviously, that situation was broader than just Foot Locker. But Chris, maybe you can just opine a bit if you like about kind of our — where we’re heading with the data and some of the exciting things.
Chris Santaella: Yes, I think we’re excited about where our adidas partnership is going. I mentioned earlier, the Anthony Edwards. So we’ve really focused on basketball and really getting young and really driving a basketball point of view through them. So that was Step 1 in the process. We’re working on multiple other product franchises. So the Samba is becoming a very strong shoe globally right now. We’ve got a big plan with that around back-to-school. We’re working on third-party collaboration ideas with them. So Certainly, when YEEZY comes out, it impacts. But certainly, our growth aspiration continues to move forward. We had to just sharpen and change a little bit of the trajectory of where that’s going based off of that.
But we feel really good about where our partnership is with adidas and the lanes that we’ve created together. They’ve been a great partner in creating exclusivity around their key icons through elevated storytelling. So that’s probably the other big piece from them that we continue to work on. So we’re seeing some good traction globally around the brand, and we’ve got some work to do in other areas.
Samuel Poser: Sam Poser with Williams Trading. Elliott, I’d like to ask you some questions in regard to — you mentioned the new foundation for some of the digital work, the CRM and sort of how long this all takes and how does all the other work being done, loyalty and all the stuff, sort of make sure that, that all works like where is the egg and where is the chicken in a sense of what you need to get the whole thing working? And how long it takes? And how long deliveries and things like that for e-commerce orders because you’re a little longer than some of your competitors right now and how that’s going to change?
Elliott Rodgers: So I’ll take the first one. This is a multiyear plan. And so you heard Mary talked about an enterprise thinking collaborative approach. Certainly, our multiyear plan has been threaded through all of the strategies that we talked — we discussed today. And so there’s a natural order — natural sequencing of things. You heard me to talk about emerging with a stronger technology core and foundation that includes investment in an ERP foundation across HR merged finance, which is very important to set us up for the next 50. And that is certainly an example of a multiyear investment. But the FLX program that Frank talked about and the expansion and scale of that, that will truly be multiyear, and we’ve threaded this across the year.
So it’s a nice sequencing that balances the appropriate amount of speed and acceleration with balancing against the risk to deliver. And we’ve thought about that we’re going to be very intentional with the expansion there. Your second question on the e-commerce times. A couple of things I would highlight is we have very recently serviced a good amount of our demand through the central part of the country. Our investments on the Coast is fairly recent. So we’re ramping up our investment in Reno, Nevada. And we’re also ramping up our fulfillment center on the East Coast in Pennsylvania. As we shift more of the volume to those nodes on the coast, we will expect our delivery times to improve. So our opportunity will be to sync our communication to the customer with the actual delivery times, but that’s something that we’re aggressively working on.
Mary Dillon: And Sam, I was just going to add one thing, which is that we also want to have our cake and eat it too. So this is a multiyear journey. We’ll do it right. But there’s plenty of low-hanging fruit, and we have digital — we have agile pods of team members working together on short-term immediate wins in digital, and we’re seeing results already. So we can both do the some of those things as well as build the foundation.
Chris Santaella: Well, I was going to — in the spirit of having your cake and eating it too, we’re focused on the short term also. So we’ve set up a digital win room that Elliott mentioned in his presentation that is solely focused on driving conversion tactics through CRM and on the site today. So Frank mentioned a few things around product recommendations. We’re doing a lot more with higher lifetime value consumers and sending them very targeted e-mails. We’re adding things to the product display pages that are calls to action around purchase. So we’re not waiting. And I think to Mary’s point on the low-hanging fruit, it’s actually the thing that gives us a lot of confidence in the digital growth plan because there are things that we know we can optimize today. So we feel really good about where we’re heading on the trajectory.
Corey Tarlowe: Corey Tarlowe with Jefferies. So Mary, one of the things that you mentioned was that I think the broadest opportunity you see specifically is that Foot Locker. And you also talked about how you ran a really comprehensive customer segmentation strategy and about how there’s a lot of opportunity for the business to gain market share. So I wanted to specifically ask about market share and where you see the market share for Foot Locker coming from, who that new customer incrementally is that’s coming into the store and how you see that unfolding as we look ahead and you continue to drive these market share gains?
Mary Dillon: Yes. Well, one of the ways to think about this is minting new customers into the category, which I think actually Foot Locker has a pretty unique role in introducing whether it’s through Kids Foot Locker graduating into Foot Locker or just as we bring a lot more attention to sneaker culture through the relaunch of the Foot Locker brand. There’s an opportunity for more folks to open up the aperture and become part of the category, frankly, as one source of growth. And it’s really about everything that we’re doing is around more customers, more share of wallet. And so — and it crosses the range from the stores of the future, the formats, the brands that we carry, the way that we create our own demand engine. And so it will be a combination of more share of wallet.
It’s like, again, a lot of consumer categories, people do shop in a lot of places, whether it’s a direct-to-consumer, an online-only retailer, physical retailers, I mean, that doesn’t daunt us because that’s true for almost any consumer category. Our job is to play our offense and really stand out and attract more customers to give more of their share of wallet to us. And that’s kind of included in everything that we’re talking about today. That is the whole way of plan.
Omar Saad: It’s Omar Saad from Evercore Partners. If I could play devil’s — a little bit. You look at the balance of the — how your inventory is going to look post this kind of Nike adjustment. Have you taken down Nike enough 55%, 60% still a very single brand-dominated retailer in a category that you’re obviously super bullish on across different use cases and brands. I don’t want to open up a new conversation, but is it possible you should be more balanced even?
